I think we're in agreement.
As far as examples about identifying the details of the approaches, I think the example of the authoritarian system is concrete enough to make my point. While in theory the "closed system" approach isn't necessarily zero sum, as their primary goal is to maintain the purity of the philosophy, in practice this particular implementation is zero sum.
As far as your approach goes, it sounds good but notice how even that approach conflicts with the authoritarian approach. You start off by saying we're all Objectivists in the important sense, but they would reject it unless you accepted their hierarchy as the only authority.
My experience with the open system approach is a little better. They can usually see some merit in the other group's approach. And they recognize the fault is not in the goal, but in the approach.
The downside to the open system approach is that it attracts insane people with their own crackpot theories. I've seen people want to mix Objectivism with conservativism, christianity, buddhism, unitarianism, vegetarianism, altruism, etc., etc. We can resist those attempts by making rational arguments against them, but a significant number of "Objectivists" don't really have a good grasp of the philosophy, the resistance is more difficult. When someone makes a claim that Objectivism should be more altruistic (think about the children!!!), they find far too much support.
I think the open system works by having self-policing, rigorous and open debate, and a market where the best ideas will win. But when many "Objectivists" are inconsistent or willing to be swayed by their "common sense" (whatever they feel is right) or emotional arguments, the policing fails. You end up in a sea of people who pick and choose which ideas feel good to them. Needless to say, the philosophy can be wildly distorted, and those defending the core ideas can end up in the minority.
This is the key problem with the open system that I can see. It's not a necessary problem, but it exists because of the context. It's like a forum being overrun by rude people If you have enough good people, they can self-police. If not, the forum gets bad. Nothing inherent about the forum.
And this adds to the sense on the closed system side that the open system side is completely willing to abandon the core, and thus are not real Objectivists. If crazy Objectivists were a tiny minority, the value of the open system approach would work out better. Too bad.
Since I'm on the topic, there's another aspect to consider. The movement as a whole, vs. the individual. I think the open system approach is best for the individual, even with the crazies out there, since he's encouraged to think for himself and understand it. The closed system approach restricts that to varying degrees for reasons I've already mentioned. As far as the movement goes, the closed system does a better job of maintaining the purity of the philosophy and representing it. By having a dictatorship, they can enforce quality control. The open approach may do great work, but it can easily be lost in the noise from the crazies. In the orthodox camp, newcomers are encouraged to really learn the philosophy, since that's all there is. In the open system areas, people are anxious to add their own unique twists, often neglecting to really learn the basics. Closed system people may pride themselves on understanding the core ideas. Open system people may pride themselves and adding something new.
Obviously there are a lot of generalities in what I've said. Personally, I favor the open system. But I can see the merits in the closed system. They have the advantage of not having to spend any serious time defending the philosophy from their fellow Objectivists. If anyone has serious disagreements, they can just throw them out of their camp instead of repeatedly defending the ideas. They can spend more time focusing on the outside world.